Half of Chinese toy exporters go under

A year or so ago the super-container ship Emma Maersk slipped in Felixstowe Harbour and started to unload - for thousands of British kids, Christmas had arrived because the vessel was carrying perhaps the biggest ever consignment of Chinese maufactured toys en route for specialist toy stores and supermarkets across the land.

Now the picture seems to be changing with remarkable speed. An official Chinese news agency has stated that more than half of China’s toy producers have gone bust over the last twelve months. If accurate, it is a staggering statistic. Most have gone under because of falling demand from Western markets, the impact of a rising Yuan most notably against the US dollar. And also because of the damage to the reputation of Chinese manufacturers from the expensive recall of toys by suppliers such as Mattel. Tougher safety standards are increasing the production costs of Chinese exporters at a time when demand for toys is being hit by the credit crunch.

Following the fears over the safety of Chinese toys, many Western government have raised safety thresholds and also revoked the export licences of producers. China’s supremacy in making ultra-low cost toys (which still sell in retail stores at a sizeable mark-up) seems to be coming to an end. Yet another reason for a marked slowdown in the Chinese economy in the months ahead.